Retail chain, lacking buyers, could begin folding Friday
With no buyer in sight, Borders Group has asked court approval to turn the bankrupt bookstore chain over to liquidators, with store closures to begin as early as Friday.
After an 11th-hour bid by equity firm Najali Cos. was dismissed by creditors, Borders was forced to ask the U.S. Bankruptcy Court in New York to approve liquidation of its 399 remaining stores by Hilco Merchant Resources and Gordon Brothers Group. The company currently employs nearly 11,000.
Borders prexy Mike Edwards said in a statement, “We were all working hard towards a different outcome, but the headwinds we have been facing for quite some time … have brought us to where we are now.”
The Ann Arbor-based retailer filed for Chapter 11 bankruptcy protection in February, listing debts of $1.29 billion (Variety, Feb. 17). While its biggest unsecured creditors were publishers, firm also owed millions to studios (Twentieth Century Fox, Sony Pictures Home Entertainment) and major music firms (Sony Music Entertainment, Universal Music Group, Warner Music Group, EMI Music).
Founded as a used bookstore in 1971 by brothers Tom and Louis Borders, the bookseller grew to become an account especially cherished by record labels, thanks to new-artist campaigns that gave important exposure to developing acts to an attractive upper-demo clientele. At it peak, it was also a top home video outlet.